A Common Currency for Belarus and Russia?

 
Author/Editor: Gulde, Anne Marie ; Jafarov, Etibar ; Prokopenko, Vassili
 
Publication Date: December 01, 2004
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: This paper discusses costs, benefits, and implementation challenges of a possible currency union between Belarus and Russia. It shows that Belarus and Russia are economically closely linked but nevertheless do not fulfill all "optimal currency area" criteria, especially the macroeconomic symmetry condition. Furthermore, we argue that the different speeds of economic liberalization over the past decade have resulted in different economic structures, with Belarus still dependent on monetary financing of budgets and industries. However, a final cost-benefit analysis also needs to consider that currency unification may bring substantial benefits from reduced transaction costs, an improved macroeconomic environment in Belarus, and by acting as a catalyst to advance structural reforms in Belarus.
 
Series: Working Paper No. 04/228
Subject(s): Monetary unions | Belarus | Russian Federation | Currencies

Author's Keyword(s): Currency union | monetary union | Belarus | Russia
 
English
Publication Date: December 01, 2004
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2282004 Pages: 32
Price:
US$15.00 (Academic Rate:
US$15.00 )
 
 
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